Failure to Pass TPA Will Marginalize U.S. in Global Trade, Say Lawmakers, Witnesses
A failure to pass the Bipartisan Congressional Trade Priorities Act of 2014 will marginalize the U.S. from international free trade agreements, subjecting U.S. companies to comparatively high tariffs and forcing competition with sub-standard, foreign rules on labor and the environment, said Senate Finance Committee Chairman Max Baucus, D-Mont., and several witnesses at a Jan. 16 Finance Committee hearing on "Advancing Congress’s Trade Agenda, The Role of Trade Negotiating Authority.” The legislation is the 2014 iteration of Trade Promotion Authority (TPA), introduced by Sen. Baucus, Finance Committee ranking member Orrin Hatch, R-Utah, and House Ways and Means Committee Chairman Dave Camp, R-Mich., on Jan. 9 (see 14011013).
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“This isn’t the same old TPA," said Baucus, while calling for Trade Adjustment Assistance renewal in conjunction with TPA passage. "This strengthened bill tells the Administration -- and our trading partners -- what provisions need to be included in trade agreements to win Congressional support. It helps guarantee that America’s workers and companies can compete on a fair and level playing field." The "improvements are backed by a strong mechanism for Congressional disapproval. If a trade agreement fails to meet any consultation requirement, Congress can disallow the final deal from being considered under TPA procedures.”
The absence of Obama Administration pressure to support the legislation is jeopardizing passage, said Hatch at the hearing. U.S. Trade Representative Michael Froman declined an invitation to testify, according to Hatch. “If the administration does not get more involved in this effort to pass trade negotiating authority, we’re not going to be successful. It’s just that simple,” said Hatch. “When it comes to negotiating trade agreements with other countries, however, Congress’ capacity to speak with one voice to foreign nations is inherently limited. Under Article Two of the Constitution, the Executive Branch has the authority to negotiate treaties and international agreements.”
The administration, including Froman, has recently expressed support for TPA, also known as fast track authority, as the U.S. continues to eye the conclusion of Trans-Pacific Partnership (TPP) negotiations (see 14010711). TPA will help the U.S. secure TPP implementation legislation by removing the congressional amendment process, said witness Jim Allen, President, New York Apple Association. “It’s hard to imagine our negotiators returning to Congress with the risk of potential amendment. TPA provides the detail in negotiating objectives with a strong consultation process which allows for an up or down vote on agreements,” said Allen. “As U.S. Trade Representative Michael Froman said last week, we need to open markets, support U.S. jobs and increase exports of products made in America. TPA will help accomplish this.”
The access to emerging Asian markets, which are seeing increased demand for international commercial products, is critical to U.S. economic expansion, said witness David Cote, CEO of Honeywell International. “Developing countries in 20 years will account for about half of the world’s GDP. That’s a big deal and we need to be in there forging relationships now. If the U.S. is not in the vanguard of pursuing new agreements, we risk falling behind other countries that are pursuing agreements of their own,” said Cole. “We also surrender the opportunity to introduce new rules to address trade barriers and issues that did not exist previously. And that’s why it's crucial for the U.S. to continue to aggressively pursue new trade agreements and for Congress to pass improved Trade Promotion Authority.”
The Bipartisan Congressional Trade Priorities Act of 2014 fails, however, to sufficiently increase standards, said witness Larry Cohen, President of Communications Workers of America, expressing opposition to the current legislation. The bill does not outline strong rules on currency, labor rights, environmental standards and consumer protection, among other areas, said Cohen. Moreover, the legislation is poised to allow the U.S. to conclude a TPP agreement that will fuel U.S. job losses and a widening trade deficit, said Cohen. “If recent leaks and news reports are correct, USTR may be backing down on key issues like internationally recognized pollution controls and logging regulations. We need to make improvements in global environment issues, not negotiating a retreat,” said Cohen. “We’re quite concerned about the platform. We need some version of fast track authority but we need to make the standards that you spoke of, ILO standards for example, part of our standards…the standards need to be a part of fast track authority.” -- Brian Dabbs